Market strategy, innovation lift Oconomowoc PC firm to the paragon
One call to Craig Schiefelbein’s voice mail – in which the voice is out of breath and somewhat rushed – reveals at least one thing about the president and CEO of Paragon Development Systems:
1) He’s just finished working out in the company’s amply-equipped fitness center; or,
2) He’s been in a constant stream of meetings planning for the continued success of his fast-growing, PC company located in Oconomowoc, just off of Highway 67.
(Give yourself extra points for choosing 2.)
He admits that being busy is both good and bad. The bad is that he’s developing a crop of new gray hair on his 34-year-old pate. The good is that business is good. Really good.
Schiefelbein, his sister Peggy, and two others started the company as a wholesaler of computer components in 1986. Being a wholesaler enabled the fledgling company to cut down on its overhead costs – it started in a basement – and sell to a national market while not worrying about its image. It also wasn’t constrained by being tied to a high-traffic location, as most retail businesses are, which allowed the company to grow rapidly.
That strategy paid off in spades as the company recorded $1.8 million in sales in its first year. “We’ve had record sales ever since,” Schiefelbein says. He estimates the company would reach $30 million in sales for 1998.
PDS has three strong markets, targeting medium to large businesses, government and educational institutions, and the health-care industry – the largest segment of PDS’s business. The company’s emphasis is to provide solutions for its customers, even if it means selling PCs made by Compaq, IBM or Hewlett Packard, for which it is an authorized dealer.
And solutions for customers don’t necessarily come from top officers or the sales staff. One of the company’s recent innovations, the Rack N Roll, was suggested by production manager Kerry Marti. Marti was at a client location when he saw how much time was wasted just by taking PCs out of boxes and setting the systems up.
The Rack N Roll is simply a metal rack with wheels and PC units shock mounted to its multiple shelves. PDS was using the racks for its own use in the warehouse, so why couldn’t customers use them as well? Marti estimates that approximately 30% of all PDS’s 1998 sales, or 4,000 units, have been shipped using the Rack N Roll, with no reports of damage.
The Rack N Roll actually cuts down on damage caused by shipping because the number of people handling the units is significantly reduced. “These [racked systems] get rolled onto one of our trucks, if we’re delivering ourselves, or a third-party company that goes straight to the customer,” Marti says. “So it’s been a significant reduction [in handling] as opposed to the regular [UPS] shipping.”
“That was really innovative,” Brian Nowatske of Advanced Healthcare says of the system. Advanced Healthcare receives an average of 18 PCs per order and has purchased a combined total of 1,000 PCs, printers and servers from PDS to date. Nowatske estimates that the Rack N Roll system saves his staff one half hour per new PC being installed. And it saves space as well, which helps in the confined areas of medical clinics.
But the key for Nowatske in choosing PDS over other PC companies was PDS’s commitment to being a business partner with Advanced Healthcare. “They really do try to understand our business,” Nowatske says. “They really step up to the plate in terms of customer service.”
Being a local company also gives customers the satisfaction of knowing that if there are problems, they won’t have to deal with an unsympathetic voice over the phone. That happened too frequently for PDS customer Howard O’Dell of Waukesha Engine. Before PDS, O’Dell was dealing with a manufacturer in Utah and found the customer service to be lax. “I mean, what do you do when a company’s located 900 miles away?” O’Dell says.
Now, O’Dell feels that if he has a problem with one of the 400 PCs he’s purchased from PDS, he can stop on his way home from work if he has to.
The company’s pride in providing solutions for customers extends to life imitating art, marketing manager Carrie Buss says. When flat screen monitors showed up on the television show “ER,” “We had a customer call us and say, ‘I want one of those monitors,'” Buss says. “It took the salesperson a week to find it because, at that time, they were brand-new.”
Old-fashioned teamwork is still abundant at PDS, too, according to Buss. “Everybody really works together and leans on each other,” she says. “We still have that small company mentality where [you say] ‘I’ll just do it.’ Even as we’re growing older and larger, people still do that. They just roll up their sleeves and go down and help out.”
Schiefelbein is predicting that the company’s sales will be $100 million-plus by 2001 and the number of employees will increase from 80 to 250. “If an average company in our industry is growing at 35% a year, that would put us at $70 million [by 2001],” Schiefelbein says. “I think we’re better than average.”
According to the plan, the company will be a nation-wide provider in the health-care market while continuing to grow as a regional provider to medium and large businesses and government and educational markets.
He foresees evolving into the small business market as well. “The largest growth area in our industry will be in small businesses,” he says. “We’re trying to develop real value for small businesses.”
And while marketing to individual consumers is feasible, Schiefelbein believes that the company’s strengths play better to multiple PC buyers. From experience, however, Schiefelbein never rules anything out. If he had, he would be Craig Schiefelbein, MD, instead of Craig Schiefelbein, CEO. “While this is Plan B,” he says of the PC business, “I think Plan B’s turned out pretty well,” noting his original intention of being a medical doctor.

{ By treating your employees right }
Employee turnover is a vicious cycle, says Milwaukee executive search consultant Paul Pagenkopf. It’s a syndrome where the more people a company loses, the more desperate it becomes. And as anyone who has been through the experience knows, replacing workers is time-consuming and costly.
“When you end up losing your people, or can only keep them for a year or two, it’s a spiral in that you are continually behind the 8-ball,” says Bob White, an information technology recruiter on Layton Avenue near the airport. “For companies that are short-staffed and can’t keep people, it puts more pressure on everybody. One of the biggest complaints I hear is: ‘My company doesn’t appreciate me.'”
In the past, employers didn’t need to concern themselves with treating employees right. The scales were tipped in their favor. Now, with workers at every level of the economy in short supply, employers who haven’t already changed their approach need to re-think the way they view their workers, White says.
According to Marlene Haigh, a Racine-based human resource specialist, what it comes down to is: How do you create that environment that induces your employees to stay?
According to a local employment survey conducted last year, the most important thing to employees is company culture. Not perks, not benefits, not even money matters most. That’s the conclusion of BDO Seidman’s Howard Sosoff, whose firm sponsored a local study on finding and retaining workers last year.
The number one thing your employees seek is a sense of engagement with their work, and to feel that what they are doing makes a difference, Sosoff says. Employees also want a comfortable work atmosphere, one in which they have the authority to make decisions, and the flexibility to take time off when they need it.
According to Donald Dailey of PricewaterhouseCoopers, the relationship between the employed and the employer is more flexible and fragile than ever.
Entrepreneurial companies, with their energy and creativity, can take advantage of their smaller size to “cut through the clutter” of larger organizations and reach the next rung of business growth, Dailey says. By virtue of their less rigid structure, entrepreneurial companies have a better chance of creating loyalty and maintaining a sense of closeness than big corporations, Dailey says.
One company that takes this concept seriously is Lakeland Supply, Inc. The 20-employee Waukesha distributor of packaging, paper and janitorial supplies promotes a sense of team through any number of company-sponsored events, from taking employees to dinner theater in rented limousines to riding around the race course at Road America in Elkhart Lake with a professional driver.
“We are like a large family,” says president Larry Schmidt II. “We feel that people are not geared into money. They want a place that is safe, where the surroundings are comfortable and they feel part of the organization. We feel our employees are our most important customers, so we want to treat them as best we can.”
That approach not only helps retain employees, it also helps recruit them. Word has gotten around that Lakeland Supply is a good place to work. In addition to the company-sponsored events, Lakeland Supply has an on-site fitness center, and offers comprehensive benefits, including a 401k plan.
“I have [former employees] who have left us and gone other places,” Schmidt says, “and these people tell me that this is the best place they ever worked for. There is a more holistic approach to the way we conduct business. We try to touch every element.”
Employee turnover is a costly proposition. While estimates vary, Schmidt says it typically costs 150% of an employee’s wage or salary to replace that person.
Employee turnover can become a vicious cycle, says Milwaukee executive search consultant Paul Pagenkopf. In his experience, the more desperate a company becomes, the higher it’s turnover rate.
“You are getting one company raiding another, particularly in skilled trades such as tool-and-die,” Pagenkopf says. “It’s a jungle out there. But if you show me a company where the standards are high, and so is the morale and espirit de corps, then the raiders are going to have a much harder time taking your people. If you have a fun place to work, where your employees feel like they’re really part of the organization, it’s hard to put a price tag on that, but I think it’s really a key factor.”
Pagenkopf says the whole employment picture has come full-circle, from the layoffs of the 1970s, to the mergers/downsizings of the 1980s and corporate re-engineering of the early to mid-1990s. All of those strategies were essentially short-term oriented, with the goal of: How quickly does it flow to the bottom line? During that period, training was cut back, and so was research and development. In many cases, apprenticeship plans were eliminated.
Invest in your workers
Instead of discarding workers whose skills are no longer current, today’s employer has to be willing to invest in their employees through training programs, say both Pagenkopf and Julie Peck, a Thiensville executive search consultant.
“Don’t get rid of people just because their skills have become obsolete,” Peck advises. “You need to assess what needs to be done in terms of training and retraining. This requires you to look ahead, to anticipate what your needs are going to be.”
Generac Power Systems Inc. has expanded rapidly. In doing so, the Waukesha manufacturer of generators and industrial engines has received any number of people who lack necessary technical training, says Generac human resources manager Stephanie Borowski.
“It’s an unskilled workforce you’re hiring from, so it becomes a matter of providing in-house basic training for people who have only worked at Burger King before,” Borowski says. We have our own Generac University.”
Generac also provides ongoing training for its existing employees, from the shop floor, to engineering to computer skills, Borowski says.
Another strategy that pays dividends is cross-training your employees, Pagenkopf says. By teaching them additional jobs or skills within your company, you get more flexibility and more productivity from your workforce, he says.
At the Pfister Hotel, executive chef Josef Zimmerman has established an informal training program for the kitchen staff. A kitchen employee begins by learning basic knife skills and working hotel banquets. Eventually, the trainees work on the cooking line for banquets. As they become more comfortable with food preparation, Zimmerman starts them on smaller menus. Once they’ve mastered their technique, those employees become ready to assist Zimmerman, a European-trained master chef, with the meals served in The English Room.
As a result of that in-house training program, many members of the Pfister’s kitchen support staff have climbed the culinary ladder. The internal promotions have resulted in retaining a staff of satisfied employees.
Structuring a creative benefit plan to the employee’s advantage can sometimes mean the difference between keeping or losing a key employee. Lakeland Supply’s Schmidt came up with an employer life insurance program for a 30-year-old employee. By matching the employee’s contribution, he will receive $1 million by the time he reaches age 59, or, $1.5 million by the time he reaches age 75.
“If someone really cares about our company and goes the extra mile, we want to show them that same dedication,” Schmidt says. “This way, if [the employee] stays with us until retirement age, all of the benefits come back to him.”
Offer incentives
A number of Milwaukee area companies are finding that offering employees trips as part of their overall compensation is not only a good way to reward employees for a job well done, but that it promotes team-building and the ability to reach company goals.
“A lot of companies reward their employees with cash and merchandise,” says Louise DeMarco of Incentive Experts, a subsidiary of Salentine Travel in Mequon. “Cash goes out the door to pay a bill, and merchandise is just that. Trips are very motivational. It builds loyalty within your company and gives employees an opportunity to do something they never would have done before.”
Two years ago, DMC Inc., in Pewaukee, made headlines when it took all 97 of its employees to Walt Disney World in celebration of the company’s 10th anniversary. The trip combined pleasure with training at the Disney Institute.
“If we are successful, we are willing to give that back to the company,” says Jeff Nowak, president of the Pewaukee direct-response advertising firm. “I think if more businesses try to look at bringing some fun into the workplace, it makes it easier to create a team atmosphere.”
According to Jackie Salentine, employers who use incentive travel generate a three-to-one return on their investment, with some of her clients achieving a five-to-one return. She arrives at that ratio by taking a company’s expected annual sales increase compared to the additional increment they receive when they reward employees with travel.
“It’s a really good way to institute behavioral changes without being a watchdog,” Salentine says.
According to Bill Troyk of Roadrunner Freight near Mitchell International Airport, offering employees trips is an alternative means to money for rewarding them. Roadrunner limits the trips to its terminal managers and their spouses.
Roadrunner lets employees select the destination. The first year, the company took employees to New Orleans. Last year, 45 people went on a Caribbean cruise. Next month, it’s Cancun for four nights and five days. The trips generally cost Roadrunner about $75,000, and employees are asked to contribute $500 if they bring their spouse.
“People talk about it for two to three months after,” Troyk adds. “You can use this as a tool to sell the job to people who are being promoted, and it’s also not a bad recruiting tool.”
Not all companies can afford to take their employees on vacation. At Value Computer Accessories in Pewaukee, a distributor of computer connection parts, Jenni DeGlopper rewards employees for meeting goals by letting them go to the movies on company time. Another monthly incentive is allowing employees to leave two hours early if goals are met.
DeGlopper decided to implement the incentives in lieu of annual Christmas bonuses, which got handed out regardless of the company’s performance. Now, if the sales goal is reached, everyone at the 18-employee company gets $100.
“We are tying it to performance,” DeGlopper says. “It has helped me achieve some company objectives, and it gets people talking together and working together. It’s amazing. You get warehouse people asking where the sales are at for the month. It gets everyone involved and helps keep people motivated.”

New Berlin bakery in line for some Super exposure
Dolly Mertens has been anxiously awaiting this season’s National Football League playoffs.
But her focus isn’t so much on the Green Bay Packers’ possible return to Super Bowl XXXIII in Miami. That would be icing on the cake, so to speak, for the owner of the New Berlin bakery.
Mertens has a solid team behind her as she is a finalist in a contest to win a commercial on the television broadcast of the Super Bowl.
Thanks to teachers and students in the West Allis-West Milwaukee school system, Mertens’ Wild Flour Bakery could be selected to be showcased as the winner in Mail Boxes Etc.’s “See Your Small Business on the Super Bowl Search II.”
The winner is highlighted in a nationally-televised Mail Boxes Etc. commercial during the Super Bowl, which is expected to have an audience of 130 million people.
As of presstime, the bakery was among the top 10 finalists in the contest which attracted thousands of entries. The top three finalists were to be named the first week of this month.
A 30-second commercial on the Super Bowl this year will cost regular advertisers $1.6 million, notes Karen Gajewske, of Mail Boxes Etc. headquarters in Escondido, Calif. But she called the exposure “priceless.”
In addition to the nationwide exposure from the commercial, the winner will receive $5,000; second- and third-place winners will receive $2,000 each.
“It’s been phenomenal,” Mertens said of the process – especially the part involving the students and educators who’ve come together in the effort. “It’s a wonderful opportunity that we can encourage young people and make something for us at the same time. And it shows the community that our young people have great talents.”
The Super Bowl contest has been another serendipitous event for Mertens, who ran a residential and commercial cleaning business before she found her real calling.
“I always thought of bakeries in terms of just donuts. And that wasn’t my cup of tea,” Mertens says. “But one day when I was back East I saw a loaf of bread and instantly knew my mission in life.”
With her youngest son Josh as the master baker, Wild Flour quickly became established in its New Berlin neighborhood and beyond. The bakery currently employs 26 people, eight of them full-time. Its breads and pies have won reader polls in Milwaukee Magazine and The Milwaukee Journal Sentinel.
Mertens [whose husband Greg Mertens works for the U.S. Small Business Administration] attributes the two-year-old bakery’s success to one miracle after another. She’s always been a supporter of young people and has been involved in employment training programs with several area school districts.
Now she’s getting something back for that involvement. A group at the West Allis-West Milwaukee schools approached Mertens about entering the Mail Boxes Etc. contest, offering to create a video commercial of the bakery.
“I had no trouble getting people to help me on this one,” said Dennis “Bart” Bartel, a West Allis-West Milwaukee instructor who’s been instrumental in the project. Bartel saw the project as an educational opportunity for the WA-WM students, and as a way to maybe earn some income for school programs. He asked Mertens if she would be willing to donate half of any winnings to the schools. “We don’t like begging for things,” Bartel says. Mertens’ response? She’d donate the full amount.
Bartel estimates the video production took at least 100 man-hours. “I doubt too many small businesses could afford to put together a commercial like the one we did,” he says.
While the bakery positions itself as a re-creation of the neighborhood bakeries that once flourished in urban neighborhoods, Wild Flour products are distributed throughout the metro area. It ships its made-from-scratch breads and pastries far beyond its Moorland Road and Howard Avenue neighborhood – via the nearby Mail Boxes Etc. franchise owned by sisters Patty Risch and Beth Riemer at 15417 W. National Ave., of course.
Wild Flour Bakery and the local Mail Boxes Etc. franchise could be a whole lot busier if the bakery garners the Super Bowl spotlight. And both are gearing up for that prospect.
The bakery – through the West Allis-West Milwaukee students – is working on a Website that could process orders that Mertens expects would pour in from the national exposure. [While the Super Bowl commercial focuses on the first place winner and its relationship with Mail Boxes Etc., the second- and third-place winners are also mentioned.]

With qualified workers in short supply, employers are getting creative in their attempts to mine the pool of available talent. United Wisconsin Services in Milwaukee has come up with a unique way to tap the skills of parents who would like to work, but whose first commitment is to their children. The newly created Parents Program allows working mothers and fathers to spend 19 hours a week at work, and still have the ability to be with their children at all times, says United Wisconsin employment supervisor Shannon O’Brien.
The 13 working parents in the program work from 10 a.m. to noon, Monday through Friday, processing Compcare claims in an office at 3rd and Cherry Streets. The working parents are allowed to take time off when their children are not in school, and they have summers off.
“Because the market is so tight right now, this was a way of tapping into a population that others haven’t gotten to yet,” O’Brien says. “We wanted to try and cater to a different population, to people who may only have the need to work on a part-time basis, but still want to be there for their children.”
According to Paula Acker, a supervisor with Compcare Blue Cross National Government, who works part-time herself, the employees who began the program in November like the job because there is no “latch-key” anxiety that they are at work while their children are left home unattended.
Carol Aberg of Mequon previously worked for a large telephone company, but when her job was eliminated, she decided to stay at home with her two children.
“The only job that met my needs was on the third shift,” Aberg says. “That’s what most mothers end up working if they want to work.”
Aberg says processing claims for Compcare is perfect in that it allows her to still be with her children at all times. She learned about the job through a flyer that was distributed through schools and area churches.
“My sister brought this [flyer] home, and I couldn’t believe it,” Aberg recalls. “I had so many exceptions. I remember my family saying that I would never find a job like this. This is an actual day job where I can come in and feel like a normal human being. And, nobody knows that I’m even gone.”

Without a clear vision, sales team can’t know the goals
It’s often been said that there is no way you can successfully build something unless you have a plan. That’s true in part. Yes, you must have a plan, but it’s the execution of the plan that determines its ultimate success or failure.
For the sales leader, the blueprint for creating a high-performance sales organization is the sales vision.
As the leader it is your responsibility both to your company and your people to create a plan of action – a plan that can be executed by all, that will garner an excitement and willingness to achieve high standards, that will reap financial rewards for all involved and that enables you to maintain order, provide clear direction and, most important, clearly establishes you as the leader.
Your sales vision requires a great deal of time and thought. It is a message that you will want to deliver directly to your sales team in a one-way format – not in a conversational, give-and-take manner. It should not be open for discussion; remember, you are the leader. Your people expect you to share your experiences and expertise in leading them. Your people should trust you as a leader who understands them and who will design plans with their best interests in mind.
There may be one other key component to creating a strong sales vision. You may have to humble yourself and realize that in the past you did not do all you could have done to ensure the overall success of the team. For example, maybe you didn’t get out in the field as often as you told your team you would. Perhaps you haven’t done any sales training designed to enhance the skills of your people. Maybe you’ve fallen short in meeting one-on-one with your people, truly understanding their challenges and trying to assist them in overcoming those challenges.
As leaders, we all get swept away in the fast pace of the day. Sometimes we lose focus on where we should be best spending our time. So remember, be honest in your own self-assessment. That may lead to your humbling yourself in front of your team.
If you set higher expectations of your people going forward, and if you want to change some of their past behaviors, you must make them aware that you are willing to do the same. That involves a heart-to-heart talk with your staff – a talk which might start out like the following:
“This morning I am going to share with you my sales vision. In my opinion what I am about to share with all of you is a blueprint for success. Just like I have, we all came here to be a part of a winning team. We came here to make a nice living and to build a career path for ourselves. We all believe that this is the company, the industry and the products through which we can achieve our goals. However, as the leader of this team, at this time I don’t feel we are playing at a championship level. This in part is my own fault. I have fallen short in providing the field time, one-on-one time and sales training that you should expect from a great leader. That is going to change today. On the other hand, I also feel that you have fallen short in some areas also that are crucial to your individual success as well as the success of the overall team – areas such as promptness, activity and professional appearance. This vision I am about to share will enable all of us to exceed our objectives. I will share this with you now. If there are any questions or concerns, I will address those individually off-line.”
You are probably saying, Wow! Wow is right. You have just laid the foundation for the execution of your sales vision. Now you must share what you believe the team needs to carry out. You are in control and whatever is put forth now could determine the entire outcome of the success or failure of your team.
Following are some suggestions on what to include in the sales vision.

SBT Editor
A few weeks ago, SBT co-publisher Dan Meyer and I had the pleasure of sitting before a group of UW-Whitewater students who presented the findings of an in-depth survey they undertook for Small Business Times.
The presentation struck us on two fronts. First, we were pleased by the professionalism and maturity shown by the students. Second, we were strongly encouraged by the survey results which show an overwhelming support for SBT and its small business focus.
We learned that you love sales and marketing advice and profiles of successful business people and their operations.
The information, coupled with a “branding” project we’re going through, will be instrumental in setting SBT’s direction this year and beyond.
Thanks to all who took the time to respond to the survey.

Company address: 7160 W. Donges Bay Road, Mequon
Company Web site: http://demo.epmgltd.com
Industry: Promotional merchandise distributor
Number of employees: 7
Education: Bachelor of arts in journalism, University of Wisconsin-Madison; Dale Carnegie Sales Course
Family: Daughter, Samantha; and sons, Benjamin and Alexander
What was the smartest thing your company did in the past year?
"We became a Women’s Business Enterprise (WBE) and joined the Oracle PartnerNetwork."
What’s new at your company?
"Promotional Marketing Group is one of only a few companies in the country to marry the disciplines of promotional merchandise, enterprise resource planning (ERP) and supplier diversity. We developed an on-line promotional merchandise program called E-PMG, which interfaces with a client’s ERP system, such as Oracle, to reduce transaction costs and maverick purchases."
Do you plan to hire any additional staff or make any significant capital investments in your company in the next year?
"We find ourselves in a unique position and will continue to work with emerging technologies and exciting clients."
What will be your company’s main challenges in the next year? "We will be forming partnerships with companies that use ERP, to create full-service, cost-effective promotional merchandise programs."
What’s the hottest trend in your industry?
"There’s a new item every day in our industry. We’re tapping into the trend in the greater business world toward e-procurement and supply chain management."
Do you have a business mantra?
"We answer our phones with ‘May I help you?’ That says it all."
From a business standpoint, who do you look up to?
"I have been fortunate to work with some incredibly intelligent women with a strong sense of social justice, both in business and as a volunteer. My other role model and personal hero is my grandfather."
What was the best advice you ever received?
"My father told me that anything worth doing is worth doing well."
What’s the funniest thing that ever happened to you in your career?
"We have to test our products for quality control. So we ‘scientifically’ tested which kind of chocolate was more user-friendly, a two-pound bar of milk chocolate or a gift box with smaller squares of milk and dark chocolate. The smaller squares won because nobody wanted to be the first to bring out a knife and hack up the big bar."
What do you like to do in your free time?
"I’m taking classes in interior design. I would love to buy an old house and renovate it."
October 1, 2004, Small Business Times, Milwaukee, WI

Five years after selling his first high-tech company, Inc.Net, to Time Warner Telecom, Alec Ellsworth is back in Milwaukee, nurturing another new venture.
Ellsworth started the new company, Resilient Networks, in May 2003. The firm is a regional integrated communications provider, a telecommunications firm with a focus on data networking, that serves small and mid-sized businesses.
The company leases space at 3701 W. Burnham St. near Miller Park.
"I like to call them a next-generation ISP (Internet service provider)," said Neil Biondich Jr., chief executive officer of Red Anvil LLC, a strategic partner of Resilient Networks.
Internet service is one of several services Resilient provides to its customers. The firm provides a suite of traditional and advanced services designed to extend the reach of its customers’ IT infrastructure, increase flexibility and improve cost effectiveness.
"It’s focused on what the market needs," Ellsworth said. "That’s why we’re here."
Ellsworth left Time Warner Telecom about 1-1/2 years after the firm acquired his company in 1999. When he left, Ellsworth signed an 18-month non-compete clause and observed the telecommunications marketplace, pondering business ideas.
Several business plans came his way during that time.
"Most of them were either killed in the idea phase or the equity structure phase," Ellsworth said.
In April 2003, Time Warner Telecom decided to move its data operations to Denver, where the company is based.
Five of Ellsworth’s former employees decided they didn’t want to move to Denver. Instead, they chose to work with Ellsworth to start a new venture.
"I picked out all of the shining stars," he said. "I knew who they were, of course. I talked to them. Ideas flowed. We had a desire to do something in a creative way that was beneficial to customers."
Inc.Net was a major success during the high-tech boom of the 1990s.
Ellsworth had graduated from Marquette University in 1994, where he studied dentistry. However, he was interested in computers. So that year, Ellsworth and his co-founder, Ryan Brooks, formed Internet Connect, which later become known as Inc.Net. The firm, which provided high-speed Internet service for businesses customers, was located at the Milwaukee County Research Park in Wauwatosa.
Inc.Net grew from start-up to a company with 25 employees and $8 million in annual revenues. The firm served businesses in 15 Midwestern cities. In 1998, Inc.Net won a contract from Time Warner Telecom to provide service in 18 other cities located across the nation. Then in 1999, Time Warner Telecom acquired Inc.Net.
Ellsworth said he left Time Warner Telecom because he was unhappy with the direction that company was taking his former firm.
"They squandered the talent and potential of the group we had together, and they assimilated us into the telecom culture," he said. "And that, we felt and I felt specifically, that was a mis-step."
"There’s a big culture difference between traditional telecom and data communications industries," said Tom Nelsen, president and chief operating officer for Resilient Networks and one of the five "shining stars" who re-joined Ellsworth from Time Warner Telecom. "Telecom is based upon a very close set of rules and regulations. The upside of that is you have a lot of discipline that is integrated into that philosophy. The downside is you become very rigid and slow. We come from a background of being more nimble, more flexible, more technology-oriented, innovative."
Ellsworth and his team have been developing their business for the last year and a half and have been serving a small number of customers during that development period.
"Our mission statement is to leverage our experience in networking to bring enterprise-class technologies and services to small and mid-sized businesses," Nelsen said. "Traditionally, they don’t have the resources to implement those new technologies and services that make them more productive and efficient. So, that means we’re focusing on products and services that reduce the customer’s operating cost and makes their network more resilient, which means more flexible to add new applications as well as being more redundant and reliable when failures and disasters occur."
After he left Time Warner Telecom, Ellsworth said he tried to determine the business needs that were not being met in the telecommunications marketplace. He concluded that many businesses are struggling to: deal with Internet spam and computer viruses; find ways to reduce network redundancy in a cost-affective way; protect critical data; and handle poor customer service from some other telecommunications companies.
"We’re providing the solution to those and other issues," Ellsworth said.
Resilient Networks strives to provide a high level of customer service to meet the needs of customers, Ellsworth said. Many telecommunications companies try to sell a wide array of services to their customers, even if they aren’t needed, he said. That may be beneficial in the short term, but customers become unhappy in the long term, he said.
"We want to add value to the customer," Nelsen said. "That’s a main difference from the other providers that are out there. In a lot of cases, they want (to sell) the whole pot, whether it’s in the customer’s best interest or not."
Business continuity is one of the services Resilient is focusing on to help customers avoid crippling data loss during an emergency.
"After 9/11, everybody is concerned about disaster recovery," Nelsen said. "And only the big (businesses) have access to those types of services."
Resilient also is focusing on providing converged services to lower the operating costs of its customers and enable them to be more flexible. That includes Voice over Internet Protocol (VoIP) services.
"By combining voice and data on the same access line to the customer, you reduce their access costs," Nelsen said. "What’s becoming the greater operational cost savings is the flexibility that allows you to create new applications to make the business more efficient. An example would be a distributed call center where you could have people doing telework out of their homes that are part of a complete voice and data call center system. That reduces the cost of building expense and also keeps employees very happy and satisfied with the work environment."
Resilient also handles the growing chores businesses have with combating spam and computer viruses.
"A company of 25 employees, you could put a whole full-time equivalent (employee) on spam, virus, OS updates, firewall and all of the things that come with dealing with the onslaught throughout the network," Ellsworth said. "It has increased crazily since the beginning of the year. There’s been a ramp-up you wouldn’t believe."
"The impact to the small and mid-sized business is paralyzing, because they have very small IT departments to begin with, and they are all consumed with dealing with spam and virus and general security issues," Nelsen said. "The bottom line is the small to mid-sized business cannot work on innovative applications to streamline their business if they’re busy dealing with this."
Resilient has formed strategic partnerships with several other businesses to provide a one-stop shop for all of the services its customers need. The firm’s strategic partners are: Red Anvil, which develops Web-based applications; CableCom, a fiber optic infrastructure firm,; SecurePipe, a Madison-based network security services firm; and Time Warner Cable.
Red Anvil and CableCom are located in the same building on Burnham Street where Resilient operates. Resilient and Red Anvil each own 50 percent of the network infrastructure in the building.
With those tenants and its access to fiber optic infrastructure, the building should become an attractive spot for other high-tech firms, Ellsworth predicts. Much of the building, owned by Don Kubenik, is still vacant.
"It makes that building kind of a hot spot," Ellsworth said.
Resilient’s main network operating center at Burnham Street recently went live. The company plans to host tours of its facility for customers soon.
"We interact with the customer," Ellsworth said. "We plan to pull the curtain back on the Oz that goes on in telecommunications and networking. Come on down, let’s look at how it works. Talk to the technicians that built it. Here’s how our stuff works. What are your needs? It’s an interesting approach."
Resilient Networks
CEO: Alec Ellsworth
Number of employees: 10
Location: 3701 W. Burnham St., Suite A, Milwaukee
Web page: www.resilient-networks.net
The partners
Resilient Networks, integrated communications provider (www.resilient-networks.net).
Red Anvil, LLC, Web-based application developer, (www.redanvil.net).
CableCom, LLC fiber optic infrastructure firm (www.cablecomllc.com).
SecurePipe, network security services firm (www.securepipe.com).
Time Warner Cable, cable Internet service, (www.timewarnercable.com).
Strategic partners started in County Research Park
When he was developing Resilient Networks, Alec Ellsworth knew of some other high-tech firms whose services would complement those that his firm provides.
As a result, Resilient has formed strategic partnerships with: Red Anvil LLC, which develops Web-based applications; CableCom, a fiber optic infrastructure firm; Secure Pipe, a Madison-based network security services firm; and Time Warner Cable, which provides high-speed cable Internet access.
The partners each provide a different service that all of their customers typically need, Ellsworth said.
CableCom provides fiber optic infrastructure, Resilient turns it into a network and Red Anvil provides basic Web applications for the network. All three of those companies are located in the same building in Milwaukee at 3701 W. Burnham St.
In a way, Ellsworth and those firms have graduated from Milwaukee County’s high-tech incubator, where they all got started.
"The principals of these companies I met at the (Milwaukee County) Research Park," Ellsworth said.
"Both of our businesses have complimentary services that don’t overlap," said Neil Biondich Jr., chief executive officer of Red Anvil, LLC. "If you want to provide all of the services that your customers need, you either have to do everything or form strategic partnerships."
"It makes a lot of sense," Ellsworth said. "We each have our specific roles. We don’t overlap at all. The sales forces (for each company) work together. Literally, they have weekly meetings. It’s a great way to do business in this current environment."
The firms can do a better job of serving their customers by focusing on a smaller niche and using the strategic partnerships to provide the additional services their customers need, Biondich said.
"Anytime you have to spread your focus onto too many things, your expertise is going to suffer," he said.
Ellsworth believes the relationships the strategic partners have with each other is unique.
"Most company owners might be leery of not having total control," he said. "But it has worked out really well."
– Andrew Weiland, of SBT
October 1, 2004, Small Business Times, Milwaukee, WI

Small Business Times will launch the Wisconsin Business and Technology Expo, designed to be the largest business-to-business exposition in the state, in 2005.
The two-day networking and informational event will be open to all businesspeople and will be the first of its kind in Wisconsin, said Dan Meyer, publisher of Small Business Times.
The expo will include educational seminars, after-hours networking, two awards ceremonies and will accommodate as many as 180 exhibitors.
"The purpose of the expo is to facilitate commerce by bringing buyers and sellers in the region together in a cohesive environment and to provide potential buyers with a real life experience of companies in the region," Meyer said.
The event will take place April 20 and 21, from 9 a.m. to 4 p.m. at the Wisconsin Exposition Center at State Fair Park, 8200 W. Greenfield Ave., West Allis.
Individual tickets will cost $15, but each exhibitor will receive free admission tickets to hand out to existing and potential customers.
Throughout both days, 30-minute educational seminars will be held on topics such as succession planning, banking, technology, human resources, negotiation, execution, sales management, productivity improvement, leadership, family business, dealing with the media and public relations and branding.
The Expo will include the Southeastern Wisconsin Regional Business Conference and the Bravo Entrepreneur Award luncheon on April 20 and the Innovation in Business Award luncheon on April 21.
After-hours business networking will be held April 20 from 4:30 p.m. to 7 p.m.
"We are excited to be able to provide attendees with an advanced integrated marketing opportunity," Meyer said. "Small Business Times began a daily e-mail newsletter (www.biztimes.com/daily) this year in addition to our printed newspaper, and now with the tradeshow we can provide prospective customers with a real-life experience of companies in Wisconsin."
All local chambers of commerce and their members will invited to participate in the event.
The Wisconsin Business and Technology Expo is modeled after a similar event that has been held annually for 20 years in Baton Rouge, La. The Louisiana event is presented by the Baton Rouge Business Report. Last year, the event drew 5,000 attendees over two days and featured 192 exhibitors, according to Julio Melara, president and co-owner of the Baton Rouge Business Report.
"The Expo is a business shopping mall," Melara said. "It is a great investment for exhibitors and a great opportunity for attendees to check out some of the best resources and tools for business that are offered right there in their own backyard."
Melara said the Louisiana event has become the Baton Rouge area’s premier business networking event.
"Part of the purpose is to help business people connect with one another and to help showcase the latest technologies and business solutions," Melara said.
The Wisconsin Business and Technology Expo’s two awards programs, the Southeastern Wisconsin Bravo Entrepreneur Awards and the Innovation in Business Awards, will be open to any individual or business that is based in or has a location in southeastern Wisconsin, Meyer said.
The Bravo Entrepreneur Award will be given to one entrepreneur from each county in the Small Business Times circulation area, which includes Milwaukee, Waukesha, Walworth, Kenosha, Racine, Ozaukee, Washington and Sheboygan counties. The Innovation in Business Awards will be given to companies in southeastern Wisconsin that have created a clever and unique product or service.
The criteria for the Innovation in Business award is that the product or service must be able to lead a sustainable business, must have an excellent market potential for success and must be in the marketplace or a testing phase in which customers are implementing the product or using the service.
"It is an experiential marketing approach," Meyer said. "Our advertisers and exhibitors can give attendees a real idea of what they are all about."
Further information about the Wisconsin Business and Technology Expo is available by calling Sarah Wilson at (414) 277-8181, ext. 129, or visiting www.biztimes.com/expo.
October 1, 2004, Small Business Times, Milwaukee, WI

There’s probably no more common cliche of selling than, "know your customer’s business." The phrase is a mantra in even the most elementary seminar on improving your sales skills.
Yet, for all the exhortations sales trainers and managers make telling front-line salespeople to understand the customer, the single most common complaint senior executives make about the salespeople they encounter is, "they don’t understand our business."
So, where’s the disconnect? It comes from salespeople not asking themselves three key questions: How do I want to be perceived by the customer? How do I get good business knowledge? What do I do with it?
How the customer perceives your value
First, you have to accept the premise that customers perceive your value based on how you sell, not what you sell.
If you want to be viewed as a vendor, then knowledge of your own product is all that counts. Your discussion of the customer’s business is no more than a gimmick to help you find an opening to pitch your product. But is being viewed as a vendor really your goal? Almost certainly not.
Most salespeople prefer to be viewed as problem-solvers. Yet in the real world, the difference between a problem-solver and a vendor is hardly noticeable. The problem-solver asks business questions simply as a means of identifying a need for which the problem-solver wants to force a solution. When all you sell is hammers, it’s funny how everything can look like a nail.
Your goal as a salesperson should be to be seen as a true business resource to your customers. And to get there, you need to develop a holistic view of the customer’s business beyond that which merely relates to the solutions you’re selling.
Sounds easy enough. But put yourself to the test with these questions: How much do you know about your customer’s customers? Your customer’s competitors? The evolving marketplace in which your customer operates? What are your customer’s top three strategic initiatives? What do they view as their core competencies? A true business resource can answer those questions with confidence.
How to get meaningful business knowledge
But how do you get that depth and breadth of knowledge about your customer?
Start with the easy and obvious sources, publicly available information on your key customers, mostly from their Web sites and Internet searches.
A vendor or problem-solver stops there, but not a business resource. One of the most powerful tools to a business resource salesperson is the knowledge call. A knowledge call is fundamentally different from a conventional needs analysis meeting and should become a standard part of your selling repertoire. Indeed, it should be your tool of choice.
A true knowledge call requires you to leave your solutions outside the door when you visit the customer ( even if, during the knowledge call, the customer happens to mention a problem for which your solution is a dead ringer.
Otherwise, you simply turn the knowledge call into a needs analysis meeting. And what could have been a valuable source of honest and in-depth understanding of the customer’s business descends to a dialogue about your customer’s problems and your solutions, sort of a sales pitch in disguise.
We can’t stress this enough. On the knowledge call, you are not there to discuss solutions. You’re there to ask strategic business questions and to listen aggressively.
How to put customer knowledge to use
Once you have this knowledge of your customer’s business, what do you do with it? The very best place to use it is in a business presentation to your customer ( preferably at the executive level. Executives assign value to your understanding of their business.
To see how it works, consider Ed, a national account salesperson for a major credit card transaction equipment and services company.
Ed had spent time learning about his customer through knowledge calls with low- to mid-level contacts at the company. With that knowledge in hand, he wrote and delivered a business presentation to the president of the customer firm, a mid-sized Chicago-based financial institution.
Up front in the presentation, Ed took five minutes to quickly confirm his perception of the customer firm’s business environment, its objectives and the strategies to achieve those objectives ( not just his perception of the customer’s problems.
As Ed wrapped up the summary of his understanding, and before even saying a word about his own company, he asked the chief executive, "Let me do a reality check: Are we in the ballpark with our perceptions of your business?" The president paused several seconds, then replied: "You have a better understanding of our business than many of the people who work here. I know your boss is here so I shouldn’t be asking this question in public, but are you interested in coming to work for us?"
Now, Ed didn’t go to work for the customer firm. But the president’s question didn’t bode well for Ed’s competitors (and yes, Ed did get the business).
So, if you’re going to be a business resource, act like one. Leave the solutions at the door, ask strategic business questions and get some mileage for your knowledge of the customer’s business.
Jerry Stapleton and Nancy McKeon are with Stapleton Resources LLC, a Waukesha-based sales force effectiveness practice. They can be reached at (262) 524-8099 or on the Web at www.stapletonresources.com.
October 1, 2004, Small Business Times, Milwaukee, WI